Filing taxes

[gouchobob]

No I am not self employed. I work remotely over the computer to my old job in Florida. All my work is processed in Florida. I was in Argentina every day last year except for the 2 weeks I was on vacation in Uruguay.

Ok, did you receive a W2 at the end of the year or a 1099 from your employer? You should have received something. Once you answer this question we can proceed. I am going to assume from your answer that you lived in Florida before coming to Argentina.

 

[Nicole_Ramirez]

Ok, did you receive a W2 at the end of the year or a 1099 from your employer? You should have received something. Once you answer this question we can proceed. I am going to assume from your answer that you lived in Florida before coming to Argentina.

Yes, I have my W2 & I did live in Florida : )

 

[gouchobob]

Yes, I have my W2 & I did live in Florida : )

Ok, if you received a W2 then social security taxes and perhaps income taxes have already been deducted from your pay. Given that you live overseas for all of the year you qualify for the Foreign Income Exclusion, you still owe social security taxes but those have already been deducted from your pay check. Any income tax that has been with-held from your check you should get refunded to you(if you are having income taxes withheld by your employer you want to ask them how to stop this as your are not subject to U.S. income tax for amounts under $91,500).

How to file would be the next question you have until the 15th of April. You could wait longer if you request and file an extension. If you are comfortable doing it yourself there are a number of tax software packages you can use online from Argentina, its really quite easy. Given you are writing for advise I am going to assume you are not comfortable doing it yourself.

I assume you have friends and relatives still in the States. I would ask them if they know someone who can take care of this for you. If all you have is one W2 doing your taxes would be very easy probably a 20 minute job for any competent tax preparer. My guess you could hire somebody to do this for under a $100. Another thought would be any close relative you have back in the states that does their own taxes could probably do it as well. It shouldn't take anybody more than a few minutes to complete.

Florida does not have an income tax so you don't have to worry about that. As you are living in Argentina you are suppose to pay income tax in Argentina even though its money earned in the U.S. You would have to contact an accountant or somebody like that to file taxes in Argentina. Frankly, I don't think many people file as they are suppose to but you might want to check it out if you are the type of person who wants to be
100% legal.

 

[citygirl]

Agreed - you meet the physical residency test so you definitely want to file for the foreign income exemption. Which can save you quite a bit of money, not a bad thing I don't know any CPAs that do it for $100 USD but still, well worth paying for it. It's a simple process but in my experience, best left to professionals. If you need a recommendation, I am happy to forward on my accountant to you (he charges $250 and this is my first year using him but have been pleased so far).

Because you live overseas, you are allowed an automatic 2 month extension until June 15. From the IRS
When to File

If you reside overseas, or are in the military on duty outside the U.S., you are allowed an automatic 2-month extension to file your return until June 15. However, any tax due must be paid by the original return due date (April 15) to avoid interest charges.
If you are unable to file your return by the due date, you can request an additional extension to October 15 by filing Form 4868 before the return due date. However, any payments made after June 15 would be subject to both interest charges and failure to pay penalties."

 

[gouchobob]

Agreed - you meet the physical residency test so you definitely want to file for the foreign income exemption. Which can save you quite a bit of money, not a bad thing I don't know any CPAs that do it for $100 USD but still, well worth paying for it. It's a simple process but in my experience, best left to professionals. If you need a recommendation, I am happy to forward on my accountant to you (he charges $250 and this is my first year using him but have been pleased so far).

Because you live overseas, you are allowed an automatic 2 month extension until June 15. From the IRS
When to File

If you reside overseas, or are in the military on duty outside the U.S., you are allowed an automatic 2-month extension to file your return until June 15. However, any tax due must be paid by the original return due date (April 15) to avoid interest charges.
If you are unable to file your return by the due date, you can request an additional extension to October 15 by filing Form 4868 before the return due date. However, any payments made after June 15 would be subject to both interest charges and failure to pay penalties."

There nothing wrong with hiring a CPA, just more expensive and probably not necessary in your case if all you have is a single W2. Good point on the automatic extension, although unless she owes something (I doubt) she wouldn't be subject to interest and penalties anyway.

 

[Nicole_Ramirez]

Thanks a bunch! Greatly appeciated!!!

 

[gouchobob]

I am a confused as to how she can qualify for the foreign income exclusion. The IRS website states:

Foreign Earned Income Exclusion - Requirements

To claim the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction, you must have foreign earned income, your tax home must be in a foreign country, and you must be one of the following:

• A U.S. citizen who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year
• A U.S. resident alien who is a citizen or national of a country with which the United States has an income tax treaty in effect and who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year, or
• A U.S. citizen or a U.S. resident alien who is physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months

So while it is true that she has not been physically present in the US for the required amount of time, she states that she is working for her employer in Florida. Therefore, she would NOT have "foreign earned income" as stated as a requirement on the above quoted text from the official IRS website, but rather domestic income being earned in the USA.

http://www.irs.gov/businesses/small/international/article/0,,id=96817,00.html

Is this not correct or am I missing something?

I can see your confusion. I believe the correct answer is that she is living abroad and she earned the money while living abroad therefor she would qualify for the exclusion. The fact that she is working for an employer in Florida doesn't really matter. Many many people work overseas for companies based back home. There is link on this below.

http://www.irs.gov/faqs/faq/0,,id=199677,00.html

 

[Nicole_Ramirez]

lol lol lol. That was my confusion in the first place, what made it foreign income. My husband would like for it to not be foreign income because Turbo Tax figured it out quite nicely. lol